Autoblog

Sluggish market conditions in the United States are the reason Toyota Motor Corp. is slowing down the launch of its new Highlander crossover plant in Tupelo, Mississippi. Originally scheduled to open in late 2009 with production at 150,000 vehicles per year, Toyota will instead begin production in May 2010 with an expected reduced annual output of 120,000 units a year. Of course, that number will increase if U.S. market conditions improve.

While the slowing economy is a leading reason for the delay, Toyota officials also confirmed that they are facing difficulty hiring skilled labor for the Tupelo project. They are now recruiting from around the country to fill positions in maintenance, along with tool and die engineers. Toyota expects to employ 2,000 workers at Tupelo. This isn't the first time Toyota has faced recruiting issues. When they opened San Antonio in 2004 and 2005, they found themselves challenged to staff the Tundra pickup plant. The Texas plant recently made headlines when Toyota slowed production of the Tundra. For the fiscal year, Toyota is forecasting operating profits to decline by 29-percent.

[Source: Automotive News, subs. req'd]

Click above for a high-res gallery of Fiat's Alfa Romeo 8C Competizione

As the dollar weakens, European manufacturers continue to scramble for manufacturing opportunities offshore to salvage profits. Fiat is the latest to jump into the fray. Company sources are saying the Italian automaker is currently considering Mexico as a production site -- with their eyes on an existing plant that could be tooled up for 150,000 cars a year. With their Alfa Romeo brand launching in the United States next year, and Fiat sales up significantly in South America, a plant in centrally-located Mexico could easily supply demand for both markets. If approved, the Mexican plant would start building Alfa Romeos and Fiats in 2011.

[Source: Automotive News, subs. req'd]

Richard Cortez, the Mayor of McAllen, Texas, called a news conference earlier this week to announce that city officials were in talks with an unnamed automaker to build a new manufacturing facility in the Rio Grande Valley. Interestingly enough, he gave few other details as he was worried about upsetting the "customer" as they have asked for silence on the project. Not to surprise anyone, but all signs are pointing at Hyundai Motor Company.

The Mayor has good reason to keep his mouth shut. Just two years ago, the South Korean automaker was in talks with local area officials about a similar project. Those plans fell through when early media leaks identified Hyundai as the potential automaker, and they chose West Point, Georgia, instead. (You are probably asking yourself, as we are, why would the Mayor call a news conference about this in the first place...)

Regardless, analysts say the Rio Grande Valley would be a good fit for Hyundai. The location is close to Mexico, so components could be assembled on the other side of the border and shipped to the United States for final assembly. If Hyundai chooses Texas for their new plant it would be their fourth facility in the United States following plants in Alabama, Georgia, and California. That is, if the Mayor can keep a secret. Thanks for the tip iSpec!

[Source: The Monitor]

After the announcement last month that BMW was increasing U.S. production while cutting jobs in Germany, the CFO of the German automaker, Michael Ganal, told WirtschaftsWoche magazine that the automaker intends to make other significant changes as the dollar continues to depreciate against the euro. As of today, the volume of cars produced in BMW's Spartanburg plant contributes to about 22 percent of the company's overall sales. However, these vehicles only account for about 10 percent of the materials purchased volume. Over the next four years, the Bavarian car company intends to increase its purchases of parts and components from domestic U.S. suppliers, and Ganal hinted that BMW may also increase production to even higher levels than the 240,000 vehicles annually manufactured on our shores. The influx of manufacturing, supply, and administrative jobs (and tax revenue) may be one of the only upsides to the continuing plunge of the dollar.

[Source: Automotive News, subs. req'd]

Click above for high-res gallery of the 2007 Toyota Tundra Limited

As of today, production of the Tundra full-size pickup is split between Toyota's facility in Princeton, Indiana, and the automaker's brand new San Antonio plant in Texas. According to a Wall Street Journal report, Toyota is considering moving all production of the Tundra to just the Texas plant. Just over two weeks ago, Toyota announced it was slowing production on the Tundra (and Sequoia) due to lagging sales. The move to consolidate all Tundra manufacturing in one location may be seen as a sign Toyota only expects to sell 200,000 full-size units or less this year, as that number represents the production capacity of the Texas facility. You may remember that Toyota boldly claimed it would sell 200,000 units of the Tundra in 2007, the newly redesigned truck's first year of sales. It missed that target, but not by much with 196,555 units sold. Toyota hasn't officially commented on the rumor yet, but we'll let you know when it breaks the silence.

UPDATE: Toyota has issued a statement saying it is not moving all Tundra production to San Antonio.

[Source: PickupTruck.com]

In welcomed news for the residents of Michigan, Toyota announced today an investment of $100 million over the next four years on an advanced research activity in their backyard. The funding will be centered around the newly established Toyota Research Institute of North America (TRI-NA), which is tasked with accelerating advanced research on energy and the environment, safety, and mobility infrastructure. TRI-NA will not build new facilities, however, though it will utilize existing space in Ann Arbor, Michigan, at the Toyota Technical Center.

The Governor of the state, Jennifer M. Granholm, understandably welcomed the news. In addition to the millions of dollars pumped into Michigan's economy, TRI-NA hopes to be staffing upwards of 60 employees by 2010. For those who are counting, Toyota now directly employs over 43,000 in North America, and it purchases more than $30 billion in parts, materials goods and services from North American suppliers each year. While a still a drop in the bucket compared to what our own domestics spend in this country, it's not for nothing.

[Source: Toyota]

The Italians are coming, the Italians are coming! And when they get here in the guise of Alfa Romeo, they will be looking for a factory where the 8C and other cars wearing the cross and serpent can be built. Alfa is looking at two options regarding a U.S.-based factory: buy one of GM, Ford, or Chrysler's closed factories, or expand a Case New Holland factory.

Case New Holland, which is actually owned by Alfa, makes agricultural machinery and construction equipment. It already has 11 plants in the U.S., and Alfa could simply expand one of them to make cars. The plant, a location for which will be selected in May, will begin churning out Alfas in 2011 or 2012. At capacity, production is expected to be around 150,000 cars for the North American and European markets. Alfa Romeo will decide on the distribution network and particular vehicles to be made within three months, which makes it sound as if the Italians are definitely coming.

[Source: Automotive News, sub. req'd]

VW hasn't yet publicly committed to building one or even two factories in the U.S. (though it's apparently considering the South, specifically South Carolina), but is making statements that sound like it's definitely on the way. VW's head of production, Jochem Heizmann, has said that the requirements for a factory are that: it not be in a hurricane zone, it be near a major airport, and that there be "no other production car in the vicinity" -- or at least, Google Translate said that for him.

The factory that will might be coming in 2011 will also source, according to Heizmann, 80% of its parts locally, or at least, in the dollar zone, which again rules out a factory in Mexico. The first couple of years it will produce up to 150,000 cars, with full production being 250,000. The boon to whatever region is chosen should obviously be significant. The reason for all this, according to Heizmann, is that in addition to developing cars with U.S. tastes in mind, the current Passat is too expensive by at least $4,000.

[Source: Auto Bild via German Car Blog]

Click above for a high-res gallery of the smart fortwo.

Roger Penske, the CEO of the company's namesake and the sole importer of the smart brand into the U.S., says that with demand at its current level, dealers could offload 40,000 fortwos to customers this year. The only problem: the U.S. market is only getting 25,000.

Penske is currently talking with Mercedes-Benz, smart's parent company, to see if it can ship more fortwos Stateside in the coming months, but that looks unlikely considering that the smart factory is running at full bore for the year.

Smart expects to sell 3,000 fortwos in the first quarter of this year through the 67 dealers (mainly Mercedes-Benz dealerships that have bought a franchise) currently in the U.S. That number is expected to increase to 74 by the end of the year. Although pre-order cancellation numbers haven't been officially released, some dealers are anticipating that around 25-percent of potential buyers that put down the required $99 deposit might opt out of the diminutive coupe. Thankfully, smart dealers in the U.S. have agreed not to mark up the cars at the risk of losing their franchise, according to the president of smart USA, David Schembri.


[Source: Autoweek]

The weak dollar is driving yet another automaker to the States. On the heels of the announcement earlier this month that BMW will increase production in the U.S, Fiat is considering moving production of both Alfa Romeo cars, and Iveco trucks, to manufacturing plants on our shores. We first broke the news in December, but now it appears Fiat is actively involved in talks with U.S. automakers to build partnerships and share manufacturing facilities with a goal of starting production by 2011 or 2012. This is positive news for consumers as Alfa prepares to once again enter the N.A. marketplace, and great news for the local economies who will benefit from additional jobs and tax revenue.

[Source: Reuters]